ARK Invest CEO Cathie Wood on Tuesday pushed back on fears of an artificial intelligence bubble, while flagging the possibility of a "reality check" on AI valuations.

Speaking to CNBC's Dan Murphy on the sidelines of Saudi Arabia's Future Investment Initiative (FII) in Riyadh, Wood said that as interest rates begin to rise, "there will be a shudder" in markets.

"We are going to reach a moment in the next year where the conversation will shift from lower interest rates to rising rates," the closely watched investor said.

"There are a lot of people out there ... who think that innovation and interest rates are inversely correlated. That is not true over history," Wood said.

"I want to disabuse people of that notion. But nonetheless, the way algorithms work these days, we think there will

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